Uber (UBER -1.88%) is in discussions to acquire food delivery company Grubhub (GRUB) in what could be a transformative deal amid the COVID-19 pandemic.
Citing people familiar with the matter, The Wall Street Journal reported the two sides have been holding talks for a while now and could reach an all-stock transaction in the coming days. Uber’s board plans to examine the deal during the next few days, reported the WSJ.
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If a deal does transpire it would bring together the two leading meal delivery services in the U.S. It comes as that part of Uber’s business is seeing growth as people across the country shelter in place to slow the spread of the COVID-19 virus. The tech stock’s core ride-hailing service has plummeted due to social distancing rules. Grubhub could help it further diversify into meal delivery.
Under terms of the deal being discussed Grubhub shareholders would get 2.15 shares of Uber amounting to about $68 per Grubhub share as of the close of trading Monday. Recently shares of Grubhub were surging on deal talks. It now has a market value of around $5.86 billion, which is tiny compared to Uber’s $58.5 billion value.
A transaction between Uber and Grubhub is part of the ride-hailing start-ups' efforts to adjust to a post-COVID-19 world where social distancing and working from home is the new normal. Just last week, at the same time it announced plans to lay off 3,700 full-time staffers, it led a $170 million investment in Lime, the electric scooter and electric bike hailing company. As part of the deal, Lime acquired the operations of JUMP, Uber’s electric bike, and scooter business. Lime is also expanding its app’s integration with Uber. When announcing the investment Uber CEO Dara Khosrowshahi noted micromobility is now a critical part of city life thanks to the pandemic.
